ASC - Ardmore Shipping: A Relatively Cheap Yield Play
2024-04-09 16:16:49 ET
Summary
- Ardmore Shipping Corporation is a transportation company that specializes in medium-range tankers for petroleum and chemical products.
- ASC has reduced its debt and improved its cash breakeven per day, making it a less risky venture for lenders.
- The current market dynamics for tankers are favorable, with elevated rates, ship prices and scrap values likely to remain high due to supply-demand imbalances.
Overview
Ardmore Shipping Corporation ( ASC ) provides transportation by sea for petroleum and other chemical products. Their fleet has a total of 26 ships with 22 being owned by the company and 4 Time Chartered-In. All of their ships fall in the MR or Medium Range Tanker Classification, and these ships are larger than handysized tankers and smaller than the gigantic VLCCs, Suezmaxs and Aframaxes. These ships are typically used for regional trade as their smaller Deadweight Tonnage (DWT) allows them to be able to use more ports and canals than their larger peers. ASC is pretty unique in that they are basically a pure MR play with no exposure to larger ships. This article will be an update to our previous article written in August of 2023. With ASC reaching our initial price target of $16, we believed an update was needed. We maintain a rating of Buy for ASC....
Ardmore Shipping: A Relatively Cheap Yield Play